HomeMy WebLinkAbout06. Authorize contract with a Schneider Distributor for the sole -source purchase of Modicon Programmable Logic Controller (PLC) HardwarePage 1 of 5
Item 6.
' CENTRAL SAN BOARD OF DIRECTORS
POSITION PAPER
MEETING DATE: DECEMBER 21, 2017
SUBJECT: AUTHORIZE THE GENERAL MANAGER TO ENTER INTO A CONTRACT
WITHASCHNEIDER DISTRIBUTOR FOR THE SOLE -SOURCE
PURCHASE OF MODICON PROGRAMMABLE LOGIC CONTROLLER (PLC)
HARDWARE I N AN AMOUNT NOT TO EXCEED $250,000 FOR THE PLANT
CONTROL SYSTEM INPUT AND OUTPUT REPLACEMENT PROJECT,
DISTRICT PROJECT 7339
SUBMITTED BY: INITIATING DEPARTMENT:
NATE MORALES, SENIOR ENGINEER ENGINEERING AND TECHNICAL SERVICES -
CAPITAL PROJECTS
REVIEWED BY: EDGAR J. LOPEZ, CAPITAL PROJECTS DIVISION MANAGER
JEAN -MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL
SERVICES
Roger S. Bailey
General Manager
ISSUE
Board of Directors (Board) approval is required to enter into a contract above $100,000 for Capital
Improvement Projects.
BACKGROUND
The treatment plant (plant) uses a Schneider Modicon Control System which is largely comprised of
Quantum Programmable Logic Controllers (PLC) connected to Quantum 800 -Series Input and Output
(1/0) cards. PLC 1/0 cards are critical for equipment and instrumentation communication to the plant
control system for process control and monitoring. The first plant PLC 1/0 card was installed in the mid-
1980s. Today, the number of 1/0 cards in use has grown to nearly 1,800. Approximately 1,100 of these
1/0 cards are 800 -series, which became obsolete in 2007. Replacement units cannot be purchased from
December 21, 2017 Regular Board Meeting Agenda Packet - Page 63 of 107
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the manufacturer, nor are they supported.
The Plant Control System 1/0 Replacement Project (Project) is a multi -phase effort to replace the 800 -
series 1/0 with modern Schneider hardware. Over the duration of the Project, we anticipate purchasing
approximately $800,000 in PLC related hardware. The first phase of the Project will retrofit the Recycled
Water Filter Plant and will include approximately $80,000 in hardware. Staff plans to pre -purchase the
PLC hardware and furnish this equipment to an installation contractor. The Fiscal Year (FY) 2017-18
budget for the Project included funds to purchase the PLC hardware for the first phase.
I n an attempt to meet year-end sales goals, Schneider is offering a 15 to 20 -percent discount on
Purchase Orders issued before December 31, 2017, that are greater than $200,000. 1 nstead of
purchasing PLC hardware for only the current Project phase, staff recommends purchasing sufficient
hardware for the next two phases of the Project, which totals approximately $250,000, including some
spares. Historically, PLC hardware prices rise nearly 4 -percent annually. The $250,000 hardware
purchase will result in approximately $50,000 in savings under the Project.
Schneider sells products through a network of distributors. Staff is soliciting competitive quotes from
several Schneider distributors and will select the lowest responsive quote. Due to the replacement of the
PLC /10 cards, quotes are for the sole -source Modicon PLC manufactured by Schneider.
ALT ERNAT IVES/CONSIDERAT IONS
Staff could include the purchase of the hardware in the construction contract with the installer or continue
with the original $80,000 purchase, which both are not recommended since there is no cost savings
anticipated. Staff is very familiar with the hardware pricing and not pursuing the purchase will forgo $50,000
in future Project savings.
FINANCIAL IMPACTS
The total cost of the hardware purchase is estimated at $250,000. This Project is included in the FY 2017-
18 Capital Improvement Budget on page 159, with a total estimated budget of $4,320,000. The hardware
purchase will require an additional budget of $150,000 this FY.
Funds will be transferred from current FY projects under the General Managers authority in the Capital
I mprovement Program (CI P). Overall, the transfer will neither result in an increase to the Project budget in
the future, nor to the C I P.
COMMITTEE RECOMMENDATION
This subject was announced at the Engineering and Operations Committee meeting on December 12,
2017.
RECOMMENDED BOARD ACTION
Staff recommends to authorize the General Manager to enter into a contract with a Schneider Distributor
for the sole -source purchase of Modicon PLC hardware in an amount not to exceed $250,000 for the
Plant Control System 1/0 Replacement Project, District Project 7339.
GOAL THREE: Be a Fiscally Sound and Effective Water Sector Utility
Strategy 2 - Manage Costs
December 21, 2017 Regular Board Meeting Agenda Packet - Page 64 of 107
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GOAL FIVE: Maintain a Reliable Infrastructure
Strategy 1 - Manage Assets Optimally Throughout Their Lifecycle, Strategy 2 - Facilitate Long-term Capital Renewal
and Replacement
ATTACHMENTS:
1. Presentation
December 21, 2017 Regular Board Meeting Agenda Packet - Page 65 of 107
Page 4 of 5
AUTHORIZE GENERAL MANAGER
PURCHASE FOR PROGRAMMABLE LOGIC
CONTROLLER (PLC) HARDWARE
Edgar J. Lopez, P.E.
s Nate Morales, P.E.
Board Meeting
► December 21, 2017
PURCHASE RATIONALE
• Central San uses a Schneider Modicon Control
���.� •sem•
System
• About 60% of the PLC cards are obsolete n
• The Plant Control System I/O Replacement
Project (DP 7339) will replace obsolete
components over the next 5 years in multiple
phases
• Schneider is offering a 15-20% discount on
Purchase Orders greater than $200,000 issued
before December 31, 2017
• Pre -Purchase of hardware for next two phases
,will save approximately $50,000
1
December 21, 2017 Regular Board Meeting Agenda Packet - Page 66 of 107
RECOMMENDED BOARD ACTION
Staff recommends the following:
Authorize the General Manager to
enter into a contract with a Schneider
Distributor for the sole -source
purchase of Modicon PLC hardware
in an amount not to exceed $250,000
for the Plant Control System 1/0
Replacement Project
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December 21, 2017 Regular Board Meeting Agenda Packet - Page 67 of 107